Willy v. The Coastal Corporation Brief for Petitoner

    N o. 90-1150

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1991

DONALD J. WILLY,

Petitioner,

versus

THE COASTAL CORPORATION, ET AL.,

Respondents.

ON WRIT OF CERTIORARI TO THE 
UNITED STATES COURT OF APPEALS 

FOR THE FIFTH CIRCUIT

BR IEF FO R PETITIO NER DO NA LD J. W ILLY

July 1991

M ic h a e l  A. M a n e s s  
Counsel of Record 

for Petitioner 
1900 North Loop West 
Suite 500
Houston, Texas 77018 
(713) 680-9922 
(713) 680-0804 (FAX)

Quality Prep & Printing, 3909 Dover, Houston, Texas 77087 (713) 643-1636



Q UESTIO N PRESENTED

Did the district court violate Article III § 2 of the 
Constitution by awarding attorney’s fees, claimed by 
defendants who wrongly invoked subject-matter 
jurisdiction by mistakenly removing the case from a state 
court, as a sanction for asserted bad-faith litigation by the 
plaintiff, who correctly resisted the unconstitutional 
exercise of federal judicial power, and who did not 
impede, obstruct, or delay resolution of any jurisdictional 
issue?

-l-



LIST OF ALL PARTIES

Petitioner Donald J. Willy was the plaintiff in the 
district court and the appellant in the court of appeals.

Respondents in this Court are the Coastal 
Corporation, Coastal States Management Company, Inc., 
James R. Paul, George L. Brundrett, Charles F. Jones, 
William L. Dunker, and E. C. (Bud) Simpson.

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TABLE OF CONTENTS
Page

OPINIONS B ELO W ......................       1
JURISDICTION........................................    2
CONSTITUTIONAL AND OTHER PROVISIONS........... 2
STATEMENT OF THE CASE.................................................2
SUMMARY OF THE ARGUM ENT....,...............................11
ARGUMENT:

The district court violated Article III § 2 of 
the Constitution by awarding attorney’s fees, 
claimed by defendants who wrongly invoked 
subject-matter jurisdiction by mistakenly 
removing the case from a state court, as a 
sanction for asserted bad-faith litigation by the 
plaintiff, who correctly resisted the
unconstitutional exercise of federal judicial 
power, and who did not impede, obstruct, or 
delay resolution of any jurisdictional issue............ ........ 15

1. Absent congressional authorization,
or obstruction of a jurisdictional 
determination, a United States district 
court cannot impose attorney’s fees or costs 
as a sanction in a case it has no 
constitutional power to decide..............   16

2. This case does not involve a federal
court’s inherent power to award attorney’s 
fees and costs for bad-faith litigation within 
its Article III subject-matter jurisdiction, or 
for obstruction of a jurisdictional 
determination. ......................       22

3. A federal court’s inherent power to
impose criminal contempt sanctions, 
without statutory authorization or an 
Article III case or controversy, does not 
justify awarding attorney’s fees to litigants 
who wrongly invoke subject-matter 
jurisdiction...................................................................25

-in-



Page
4. This case does not require the

Court to determine the extent of a federal 
court’s inherent power to impose attorney’s 
fees and costs, in the absence of statute or 
subject-matter jurisdiction, as a sanction for 
obstruction of jurisdictional determinat­
ions.............................. ................. ........................... ..27

5. The district court had no 
constitutional power to award attorney’s 
fees to defendants wrongly invoking its 
subject-matter jurisdiction, as a sanction for 
asserted misconduct relating only to the 
merits of a case it should never have
decided.................................................... .....................32

CONCLUSION.......................... ............................. ........... ....35

TABLE OF AUTHORITIES
Cases:
Aetna Life Insurance Co. v. Haworth,

300 U.S. 227 (1937)........................... .................. ...... ...19
Aldinger v. Howard, A ll U.S. 1 

(1976)................................................................... 16, 18, 19
Alyeska Pipeline Service Co. v. Wilderness 

Society, 421 U.S. 240 (1975).................................... 22, 29
American Fire & Cas. Co. v. Finn,

341 U.S. 6(1951).......................................... .................. 21
Ashwander v. Tennessee Valley Authority,

297 U.S. 288 (1936).................................................. 13, 27
Bender v. Williamsport Area School 

District, 475 U.S. 534 (1986)....................... .................. 17
Blacklock v. Small, 111 U.S. 96 (1888)...........................20
Ex parte Burr, 9 Wheat. 529 (1824).................................. 34

-IV-



Page
....34Capron v. Van Noorden, 2 Cranch 126 (1804)

Chambers v. MASCO, Inc.,__ U.S. ___ (1991)
[59 U.S.L.W. 4595, June 6, 1991].......................... 11, 22

Chemiakin v. Yefimov, 932 F.2d 124 (2 Cir. 1991).......30
Citizens’ Bank v. Cannon,

164 U.S. 319 (1896)........................................................ 20
Cooke v. United States, 267 U.S. 517 (1925) .................. . 25
Cooter & Gell v. Hartmarx Corp., 496

U.S.___, 110 S.Ct. 2447, 110 L.Ed.2d
359 (1990)......................................................... 8, 9, 19, 33

Cross-Sound Ferry Services, Inc. v. ICC,
934 F.2d 327 (D.C. Cir. 1991).................... ............... . 21

Davis v. Cluet, Peabody & Co., 667 F.2d 
1371 (11 Cir. 1982)..................... ................ ............. 23, 31

Diamond v. Charles, 476 U.S. 54 (1986).......................... 19
Dred Scott v. Sandford, 19 How. 393 

(1857)........................................     34
F.D. Rich Co., Inc. v. United States ex rel. Industrial 

Lumber Co., Inc., 417 U.S. 116 (1974)................... ......22
Finley v. United States, 490 U.S. 545 

(1989).......................      19
Gompers v. Bucks Stove & Ranger Co.,

221 U.S. 418 (1911)..........     26
Hall v. Cole, 412 U.S. 1 (1973)........................................ 22
Hanna v. Plumer, 380 U.S. 460 (1965) ........... ...............18
Healy v. Ratta, 292 U.S. 263 (1934).......... ....................... 17
Insurance Corp. of Ireland, Ltd. v. Compagnie Des 

Bauxites De Guinee, 456 U.S. 694 (1982)........... 16, 20



Jackson v. Ashton, 8 Pet. 148 (1834).............................. 34
Johnson v. Smith, 630 F. Supp. 1
(N.D. Cal. 1986)..........................   ......29

Karcher v. May, 484 U.S. 72 (1987)................................. 16
Lewis v. Continental Bank Corp.,

494 U.S. 472 (1990)..................................................... ...19
Link v. Wabash R. Co., 370

U.S. 626 (1962)......................      22
Lion Bonding & Surety Co. v. Karatz,

262 U.S. 640 (1923).... ................... ....... .................. .....20
Mansfield, Coldwater & Lake Michigan 

Ry. Co. v. Swan, 111 U.S. 379 (1884)..........................20
Marbury v. Madison, 1 Cranch 

137 (1803)..................................    16
Mashak v. Hacker, 303 F.2d 526
(7 Cir. 1962)............... .......... ......................................... .18

The Mayor v. Cooper, 6 Wall. 247 
(1868) ....................................... ................................. 11, 20

Michaelson v. United States ex rel.
Chicago, St. Paul, Minneapolis & Omaha
Ry. Co., 266 U.S. 42 (1924)......................................25, 27

Mitchell v. Maurer, 293 U.S. 237 (1934).......................... 17
Muthig v. Brant Point Nantucket, Inc.,

838 F.2d 600 (1 Cir. 1988)...... ................... ......... ......... 30
NASCO, Inc. v. Calcasieu Television and Radio, Inc.,

894 F.2d 696 (5 Cir. 1990), affd sub nom.
Chambers v. NASCO, Inc., __ U .S.___ (1991)
[59 U.S.L.W. 4595, June 6, 1991]....... .................. . 22

News-Texan, Inc. v. City o f Garland,
814 F.2d 216 (5 Cir. 1987).........................................6, 29

Page

- v i -



Page
Northern Pipeline Construction Co. v.
Marathon Pipe Line Co., 458 U.S. 50 (1982)..........  13, 27
Omni Capital Intemat’l Ltd. v. Rudolf Wolff &

Co., Ltd., 484 U.S. 97 (1987)......................................... 20
Orange Production Credit Ass’n v. Frontline 

Ventures Ltd., 792 F.2d 797 (9 Cir. 1986)......................30
Owen Equipment & Erection Co. v. Kroger,

437 U.S. 365 (1978)............................................ 16, 18, 19
Roadway Express, Inc. v. Piper, 447 U.S. 752 (1980)...... 22
Ex parte Robinson, 19 Wall. 505 (1874)............. .............34
S. A. Auto Lube, Inc. v. Jiffy Lube 

Intemat’l, Inc., 842 F.2d 946 (7 Cir. 1988)..................29
Sabine Pilot Service, Inc. v. Hauck,

687 S.W.2d 733 (Tex. 1985)..... ........................................3
Schering Corp. v. Vitarine Pharmaceuticals, Inc.,

889 F.2d 490 (3 Cir. 1989)................................. ............30
Sibbach v. Wilson & Co., Inc., 312 U.S. 1 (1941)..... 18, 23
Smyth v. Asphalt Belt Ry. Co.,

267 U.S. 326 (1925)............. .......................................... 20
Sosna v. Iowa, 419 U.S. 393 (1975)................................. 34
Szaho Food Service, Inc. v. Canteen Corp.,
823 F.2d 1073 (7 Cir. 1987), cert, dism’d
485 U.S. 901 (1988).............................. 25, 30

Thomas v. Capital Security Services, Inc.
Inc., 836 F.2d 866 (5 Cir. 1988) (en banc).............. 6, 10

Trohimovich v. Commissioner, 776 F.2d 
873 (9 Cir. 1985)....................... ........................... ...........30

Turner v. President, Directors, and Co. of the 
Bank of North America, 4 Dali. 8 (1799)..... ...............21

-vii-



Page
Unanue-Casal v. Unanue-Casal, 898 F.2d 

839 (1 Cir. 1990)..............................................................29
United Mine Workers v. Gibbs,

383 U.S. 715 (1966)........................................................ 19
United States Catholic Conference v. 
Abortion Rights Mobilization, Inc.,
487 U.S. 72 (1988)........................... 12, 20, 21, 23, 34, 35

United States v. Corrick,
298 U.S. 435 (1936)............................. .............. ......... 17

United States v. Hudson,
1 Cranch 32 (1812)......................... ......12, 22, 23, 25

United States v. Morton Salt Co., 
338 U.S. 632 (1950)......... . ................. ....... 21

United States v. Providence Journal Co., 
485 U.S. 693 (1988) ............................... .... .............12, 27

United States v. Shipp,
203 U.S. 563 (1906).......................... . ........................ 23

United States v. United Mine Workers,
330 U.S. 258 (1947)..... .......... .............. ......12, 21, 23, 32

Vatican Shrimp Co., Inc. v. Solis, 820 F.2d 674 
(5 Cir. 1987), cert, denied 484 U.S. 953 (1987)........6, 29

Victory Carriers, Inc. v. Law, 404 U.S.
202 (1971)........................... .............................. ..............17

Westlake North Property Owners Ass’n 
v. City of Thousand Oaks, 915 F.2d 1301 
(9 Cir. 1990).................................................................... 29

Willy v. Coastal Corp., 641 F. Supp.
116 (S.D. Tex. 1986)..................................................... 1, 5

Willy v. Coastal Corp., 855 F.2d 1160 (5 Cir. 1988)......2, 6
Willy v. Coastal Corp., 915 F.2d 965 (5 Cir. 1990)........2, 7

-V lll-



Willy, In re, 831 F.2d 545 (5 Cir. 1987).................... ....... ..4
Wojan v. General Motors Corp., 851 F.2d 

969 (7 Cir. 1988)................ .................................... ........ 30
Young v. United States ex rel. Vuitton et Fils S.A.,

481 U.S. 787 (1987)........................................................ 25
Constitutional Provisions:
Art. 1 § 8, Constitution of the 

United States......... ........... ......... ........ .....................18, 23
Art. Ill, Constitution of the

United States..............................     .passim
Statutes:
28 U.S.C. § 1254(1)...........................   ..2
28 U.S.C. § 1331........... ..................... .................................3
28 U.S.C. § 1441(b).... ........ ........ ...................................... 3
28 U.S.C. § 1447(c)........................ .......................18, 24, 28
28 U.S.C. § 1919................................................ ...18, 29, 32
28 U.S.C. § 2071 ............................................... ................ 28
28 U.S.C. § 2072(a).................................................... 18, 28
28 U.S.C. § 2072(b)............................................................ 18
Supreme Court Rules:
Rule 14. l( i) .......................................................................... 17
Federal Rules of Civil Procedure:
Rule 1.......................................................................  28
Rule 11.........................................................................passim
Rule 12(h)(3).......................................   24
Rule 4 1 (a)........................................................... ....... ..9, 30

Page

-ix-



Page
Rule 5 9 ..................................................................  ....7
Rule 81(c).................................  28
Rule 82 .........   18
Other Authorities:
Curtis, Notice of the Death of Chief Justice Taney, 
Proceedings in Circuit Court of the United States for 
the First Circuit (1864)..............    17



No. 90-1150

IN THE

SUPREM E COURT OF THE UNITED STATES

OCTOBER TERM, 1991

DONALD J. WILLY,

Petitioner,

versus

THE COASTAL CORPORATION, ET AL.,

Respondents.

ON WRIT OF CERTIORARI TO THE 
UNITED STATES COURT OF APPEALS 

FOR THE FIFTH CIRCUIT

BRIEF FOR PETITIONER DONALD J. WILLY

OPINIONS BELOW

The district court’s opinion on the merits is reported. 
Willy v. Coastal Corp., 647 F. Supp. 116 (S.D. Tex. 1986) 
(Pet. App. 1). That court’s first unreported order 
awarded attorney’s fees of $22,625.00 against Willy and 
his trial counsel, George A. Young, as a Rule 11 sanction 
(Pet. App. 6).



2

The Fifth Circuit’s first opinion reversed the district 
court’s decision on the merits for lack of Article III 
subject-matter jurisdiction, reversed the order awarding 
attorney’s fees, and remanded the case for 
reconsideration. Witty v. Coastal Corp., 855 F.2d 1160 (5 
Cir. 1988) (Pet. App. 9).

The district court’s second unreported order awarded 
attorney’s fees of $19,307.00 as a Rule 11 sanction 
against Willy and Young (Pet. App. 40). The Fifth 
Circuit’s second opinion summarily affirmed that 
sanction. Witty v. Coastal Corp., 915 F.2d 965 (5 Cir. 
1990) (Pet. App. 48).

JURISDICTION

The opinion and judgment of the court of appeals 
were entered on October 26, 1990 (Pet. App. 48, 56). 
Willy’s timely petition for panel rehearing and suggestion 
for rehearing en banc were filed on November 14, 1990 
and denied on November 27, 1990 (Pet. App. 56). His 
timely petition for certiorari was filed with the Clerk of 
this Court on January 17, 1991. This Court has 
jurisdiction under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND OTHER PROVISIONS

The relevant provisions of Article III of the 
Constitution of the United States, Title 28 of the United 
States Code, and F.R.Civ.P. 11 are reproduced in the 
appendix to the petition for certiorari, beginning at page 
57.

STATEMENT OF THE CASE

Donald J. Willy worked as an in-house 
environmental attorney for the Coastal Corporation in 
Houston from 1981 until 1984, when he was fired. In



3

1985, represented by George A. Young, another 
Houston lawyer, Willy sued Coastal and others 
("Coastal") in a Texas state court. He asserted that the 
company fired him because of his refusal to falsify 
environmental reports or to participate in Coastal’s 
criminal concealment of state and federal environmental 
law violations at several of its facilities. His petition 
alleged only state causes of action and sought damages 
and other relief exclusively under Texas law [R. 7: 1096], 
None of Willy’s claims arose under or was created by a 
federal statute, and he did not allege entitlement to any 
federal remedy.1

Coastal wrongly removed the case to the United 
States district court in Houston, mistakenly invoking 
original federal question jurisdiction under 28 U.S.C. §§ 
1331 and 1441(b) [R. 7: 1092, 1093]. After removal, 
Coastal filed its answer, denying each of Willy’s 
allegations and asserting 14 defenses and a counterclaim 
[R. 7: 1059],

Young promptly filed a motion to remand on Willy’s 
behalf, correctly contending that no federal question was 
presented, and that there was no diversity of citizenship 
or other subject-matter jurisdiction [R. 7: 1049], Before 
any supposedly sanctionable misconduct occurred, the 
district court mistakenly denied the motion to remand [R. 
6: 877]. Willy’s counsel later twice sought to have the 
case remanded for lack of subject-matter jurisdiction, 
without success [R. 4: 469-70; R. 9: 5-6].

1 Willy’s principal claim was based on Sabine Pilot 
Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985), which 
recognizes a cause of action in Texas for termination of 
employment resulting solely from an employee’s refusal to 
violate the law.



4

Coastal filed a motion to dismiss Willy’s principal 
state claim, maintaining that the nature of the attorney- 
client relationship precluded an action for wrongful 
termination of a lawyer’s employment under Texas law 
[R. 6: 779], Young filed a reply to Coastal’s motion to 
dismiss [R. 5: 567], a six-page motion for partial 
summary judgment, supported by Willy’s 12-page 
affidavit, and a 110-page supporting brief [R. 5: 609; R. 
6: 744], addressed principally to Coastal’s 14 defenses 
and counterclaim [R. 7: 1Q59].2 Young also sought and 
received permission from the district court to file 
approximately 1,200 pages of documents in support of his 
partial summary judgment motion [R 4: 527; R. 5: 565; 
R. 6: 742; R. 9: 38].3

Coastal filed a response to the motion for partial 
summary judgment, demanding Rule 11 attorney’s fees 
on the grounds that there was "no evidence to support 
the summary judgment" and that the motion was

2 The court of appeals’ second opinion 
mischaracterized the document as "the infamous 110-page 
summary judgment motion." 915 F.2d at 966 n. 3 and 968 
(Pet. App. 49, 54-55). No local court rule imposed a page 
limitation on the brief.

3 The documents were produced by Coastal during 
discovery in an administrative action Willy filed against 
the company in 1984 with the Wage and Hour Division of 
the United States Department of Labor. He asserted that 
the termination of his employment violated the 
"whistleblower" provisions of several federal environmental 
statutes. See In re Willy, 831 F.2d 545 (5 Cir. 1987). That 
proceeding is pending before the Secretary of Labor.

The lower courts criticized the documents because they 
were unnumbered, unindexed, and unorganized (Pet. App. 
7, 36, 41), but their filing violated no statute or rule 
imposing specific requirements in that regard.



5

"unwarranted and wholly inadequate" [R. 4: 544]. 
Coastal also filed a supplemental response and brief 
supporting its request for sanctions, setting out what it 
regarded as inappropriate behavior by Young, and 
attributing his actions to Willy [R. 4: 485; 512]. Although 
no discovery was undertaken, only two potentially 
dispositive motions were filed, and less than two hours of 
hearings were held, Coastal represented that its 
attorney’s fees and costs exceeded $85,000.00 [R. 4: 427],

In its reported memorandum and order, the district 
court declined to reexamine its subject-matter 
jurisdiction, rejected Willy’s principal state law claim on 
its merits, and granted Coastal’s motion to dismiss the 
remainder of the case. Willy v. Coastal Corp., 647 F. 
Supp. 116 (S.D. Tex. 1986) (Pet. App. I).4 In an 
unreported order, the court awarded attorney’s fees of 
$22,625.00 to Coastal against Willy and Young, jointly 
and severally, as a Rule 11 sanction (Pet. App. 6). The 
order sanctioned Willy for Young’s filing of the motion 
for partial summary judgment, the 110-page supporting 
brief, the 1,200 pages of documents that the district court 
granted permission for Young to file, and another brief 
misciting a provision of the Federal Rules of Evidence 
[R. 5: 567, 572].5 Although Willy did not sign these 
pleadings, the order held him personally responsible for

4 The court of appeals’ second opinion mistakenly 
stated that the district court granted Coastal’s motion "for 
dismissal of the federal claims," 915 F.2d at 966 (Pet. App. 
49). As the first panel correctly held, Willy asserted no 
federal claims.

5 The district court also criticized Willy’s 12-page 
affidavit supporting the motion for partial summary 
judgment, believing that the affidavit failed properly to 
authenticate the 1,200 pages of documents (Pet. App. 7).



6

them, and for all of Young’s other supposed misconduct.

Willy filed in the Fifth Circuit a motion to stay the 
sanctions order pending appeal, on the grounds that 
Young had been hospitalized in a Minnesota alcohol and 
drug abuse treatment facility. The court of appeals 
denied the stay [R. 3: 290-91].

Willy discharged Young, retained his present 
counsel, and appealed. The Fifth Circuit ruled that the 
district court lacked subject-matter jurisdiction, reversed 
its mistaken decision on the merits, and directed that 
Willy’s claims be remanded to the state court from which 
Coastal had wrongly removed them almost three years 
earlier. Willy v. Coastal Corp., 855 F.2d 1160 (5 Cir. 
1988) (Pet. App. 9, 10). The panel also reversed the 
Rule 11 sanctions order, stating that "we and the district 
court retain jurisdiction over the Rule 11 aspect of this 
case, even though we have held that removal was 
improper," 855 F.2d at 1172 (Pet. App. 35), and 
remanded the case for reconsideration in light of the 
intervening en banc decision in Thomas v. Capital Security 
Services, Inc., 836 F.2d 866 (5 Cir. 1988) (Pet. App. 37, 
38).6

On remand, Willy argued that awarding attorney’s

6 The first panel cited two cases, in which sanctions 
were sought for wrongful removal, to support its position 
that federal courts without subject-matter jurisdiction are 
empowered to award attorney’s fees to defendants wrongly 
removing cases from state courts. Vatican Shrimp Co., Inc. v. 
Solis, 820 F.2d 674 (5 Cir. 1987), cert, denied 484 U.S. 953 
(1987); News-Texan, Inc. v. City o f Garland, 814 F.2d 216 (5 
Cir. 1987). Willy maintained that the decisions do not 
establish or even suggest that proposition. The second 
panel thought that "this conclusion is implicit in their 
broader holding." 915 F.2d at 967 n. 6 (Pet. App. 52).



7

fees to defendants who wrongly removed the case, 
against a plaintiff who successfully contested subject- 
matter jurisdiction, was inconsistent with Rule 11 and 
would violate Article III of the Constitution [R. 2: 189]. 
The district court held a hearing, severed the sanctions 
issues, remanded the remainder of the case to the state 
trial court from which Coastal had improvidently 
removed it 39 months earlier, and awarded $19,307.00 in 
attorney’s fees to Coastal as a Rule 11 sanction against 
Willy and Young, jointly and severally [R. 11: 2-4] (Pet. 
App. 40). Willy’s timely motion under F.R.Civ.P. 59, 
reurging his argument that Article III foreclosed the 
award of attorney’s fees, was denied without opinion [R. 
1: 5; 2: 57].7

The Fifth Circuit summarily affirmed the attorney’s 
fee award, holding that "Rule 11 must embrace the 
conduct of those who resist, as well as those who invoke, 
federal jurisdiction," in order to effectuate goals of 
deterrence and punishment. Willy v. Coastal Corp., 915 
F.2d. 965, 967 (Pet. App. 48, 52). The court’s opinion 
attributed to "Plaintiff" or "Willy" additional acts of

7 Willy filed a motion to stay the second sanctions 
order pending appeal, asserting in an accompanying 
affidavit that he had assets worth less than $21,000.00 [R. 2: 
63, 66]. Coastal did not contest that figure but instead 
argued that a stay should be denied because Willy had not 
shown his inability to borrow the money [R. 2: 24, 27-28], 
Attached to Willy’s application for stay were extracts from 
Coastal’s 1988 annual report, establishing that the company 
and its operating subsidiaries in that year had revenues of 
more than $8 billion, profits of more than $718 million, net 
earnings of more than $157 million, and total assets of 
almost $8 billion, resources approximately 400,000 times 
greater than Willy’s [R. 2: 69-75]. The district court denied 
the stay without opinion [R. 1: 6]. Young elected not to 
appeal the second sanctions order.



8

purported misconduct by Young, set out in the second 
sanctions order, that had not been specifically mentioned 
in the first order almost four years earlier.8

The panel believed that the district court possessed 
inherent power to award attorney’s fees to Coastal as a 
Rule 11 sanction against Willy, even though the court 
never possessed Article III subject-matter jurisdiction 
over the controversy at any stage of the proceeding, and 
even though Coastal, rather than Willy, wrongly invoked 
federal jurisdiction. The panel opinion analogized this
case to Cooler & Gell v. Hartmarx Corp., 496 U.S. ___,
110 S.Ct. 2447, 2456, 110 L.Ed.2d 359, 376 (1990), 
thinking it involved, not "a judgment on the merits of an 
action," but rather, like the imposition of costs,

8 The alleged, previously unremarked violations were 
(i) Young’s inclusion in a pleading of irrelevant and 
inflammatory allegations that had been stricken; (ii) 
Young’s filing of responses to Coastal’s motion to dismiss 
that were "confusing, misleading, and not reasonably based 
on law or fact"; (iii) Young’s allegation in a pleading that 
Coastal’s counsel were engaged in an improper conflict of 
interest; (iv) Young’s misquotation in a pleading of a 
Texas disciplinary rule; (v) Young’s statement in open 
court that he intended to depose no less than 60 individuals 
in connection with the case; and (vi) Young’s filing on 
Willy’s behalf of a separate federal civil action "in an 
effort to harass Defendants in this case" (Pet. App. 43, 44).

Young filed the supposedly "baseless RICO claims 
against eighty Coastal officers and employees,” 915 F.2d at 
968 (Pet. App 55), in a different case. The complaint was 
never served on any defendant, and the federal judge in 
that case did not impose Rule 11 or other sanctions.

The Fifth Circuit mistakenly asserted that Willy 
"[used] the discovery process to harass opposing parties," 
915 F.2d at 966 n. 3 and 967 (Pet. App. 49, 52). In reality, 
the district court stayed discovery pending its ruling on 
Coastal’s motion to dismiss [R. 4: 527].



9

attorney’s fees, and contempt sanctions, "the 
determination of a collateral issue: whether the attorney 
has abused the judicial process, and, if so, what sanction 
would be appropriate," 915 F.2d at 967 (Pet. App, 51).9

The court of appeals also believed that awarding 
attorney’s fees against Willy was not foreclosed by the 
defendants’ wrongful removal of the action. Finding a 
colorable basis for the district court’s mistaken rejection 
of Willy’s jurisdictional position, and that Coastal acted in 
good faith, the panel reasoned that Cooler & Gell permits 
litigants and lawyers wrongly invoking federal jurisdiction 
to recover attorney’s fees under a federal court’s inherent 
power, even though the derelictions and award relate 
only to the merits of a controversy the court was never 
constitutionally empowered by Article III or by Congress 
to decide in the first place. 915 F.2d at 967 and n. 7 
(Pet. App. 52).

Finally, affirming the broad discretion that Cooter & 
Gell accords to federal trial judges under Rule 11, the 
Fifth Circuit found no abuse of discretion in this case. 
The panel condemned "reams of irrelevant and

9 The panel acknowledged Willy’s argument that Cooter 
& Gell is not controlling because the Rule 11 attorney’s fee 
award there was collateral to an Article III controversy 
over which the federal court properly exercised subject- 
matter jurisdiction, invoked by the sanctioned attorneys, 
even though they dismissed the case under F.R.Civ.P. 41(a) 
before the sanctions were imposed. Here, by contrast, the 
federal court never possessed Article III subject-matter 
jurisdiction at any stage of the proceedings, and Willy, the 
sanctioned party, did not invoke such jurisdiction but 
instead repeatedly and successfully contested it. 
Nonetheless, the court found Cooter & Gell's "discussion of 
the collateral character of Rule 11 orders applicable in this 
context as well." 915 F.2d at 967 n. 5 (Pet. App. 51).



10

unorganized material," 915 F.2d at 966-67 n. 3 (Pet. 
App. 49), without mentioning that the district court 
granted permission for Young’s filing of the documents, 
or that Coastal produced them. The panel also did not 
disclose that virtually all of the supposed misbehavior 
attributed to Willy personally by its opinion and the 
district court’s order had been committed by his lawyer, 
or that the revised order awarded attorney’s fees for 
purported misconduct never specifically mentioned in the 
first order 29 months earlier. The court mistakenly stated 
that the first panel affirmed the original sanctions order 
when it actually reversed it.10 It summarily ratified the 
district court’s implicit determination that the substantial 
award favoring the defendants was appropriate and 
reasonable, as required by Rule 11, and was the "least 
severe sanction adequate to [serve] the purpose" of the 
Rule. Thomas v. Capital Security Services, Inc., 836 F.2d 
866, 878 (5 Cir. 1988) (en banc). Willy’s petition for 
panel rehearing and suggestion for rehearing en banc 
were denied without opinion (Pet. App. 56).

10 The first panel nullified the original sanctions order. 
"The sanctions order is therefore reversed and the matter 
of sanctions is remanded to the district court for further 
proceedings consistent with this opinion and Thomas." 855 
F.2d at 1173 (Pet. App. 38). The panel’s judgment recited 
that the sanctions order "is set aside" [R. 3: 224], 
Nevertheless, the second panel held that the first panel 
"affirmed the award of Rule 11 sanctions," 915 F.2d at 966 
(Pet. App. 49). Concluding that "we are bound by our prior 
decision affirming the district court’s award of sanctions 
against both Willy and his attorney," 915 F.2d at 968 (Pet. 
App. 54), the court declined for that reason to consider or 
decide five issues presented by Willy’s brief. Although 
Willy’s petition for panel rehearing and suggestion for 
rehearing en banc pointed out the error, the Fifth Circuit 
refused to correct it.



11

SUMMARY OF THE ARGUMENT

1. Article III of the Constitution limits the judicial 
power of the United States to cases and controversies 
over which Congress has conferred subject-matter 
jurisdiction. Absent congressional authorization, or 
interference with the determination of its jurisdiction, a 
federal court has no inherent power to award relief in a 
case over which it is constitutionally powerless to act. "If 
there were no jurisdiction, there was no power to do 
anything but to strike the case from the docket." The 
Mayor v. Cooper, 6 Wall. 247, 250 (1868).

2. In cases within their Article III subject-matter 
jurisdiction, federal courts possess an inherent power to 
award attorney’s fees and costs for bad-faith litigation.
Chambers v. NASCO, Inc., __  U. S. ___ (1991) [59
U.S.L.W. 4595, June 6, 1991]. That power, implicit in 
the Constitution, is necessary to attain the ends for which 
Congress created lower federal courts: to determine 
reliably, as courts of limited jurisdiction, that they are 
empowered to act, to resolve cases or controversies 
defined by Article III and by statute, and to assure the 
just, speedy, and inexpensive determination of federal 
judicial proceedings.

Even in the absence of subject-matter jurisdiction, 
federal courts must have a coextensive, functionally 
equivalent inherent power to award attorney’s fees and 
costs against those who unreasonably or in bad faith 
impede, obstruct, or delay the eventual determination 
that subject-matter jurisdiction is lacking, or who willfully 
violate orders entered to preserve the status quo until 
jurisdictional questions are resolved. A federal court has 
jurisdiction to determine its own jurisdiction, apart from 
statute or the constraints of Article III. It properly may



12

regard strategic concealment of jurisdictional defects, 
calculated obstruction of preliminary jurisdictional 
determinations, or willful violation of orders necessary to 
permit orderly resolution of questions relating to its 
constitutional power to act as an interference with the 
performance of a judicial responsibility consigned to it by 
the Constitution. United States v. United Mine Workers, 
330 U.S. 258, 290-92 & n. 57 (1947); United States 
Catholic Conference v. Abortion Rights Mobilization, Inc., 
487 U.S. 72, 79 (1988). Awarding attorney’s fees and 
costs as a sanction in such cases reasonably promotes 
necessary, constitutionally indispensable objectives. 
United States v. Hudson, 7 Cranch 32 (1812).

3. Independently of subject-matter jurisdiction or an 
Article III case or controversy, federal courts possess 
inherently a limited, defensive criminal contempt power 
to punish by fine or imprisonment deliberate disruptions 
of judicial proceedings, willful disregard of lawful court 
rules and orders, or other calculated misconduct affecting 
the performance of judicial duties. United States v. 
Providence Journal Co., 485 U.S. 693, 701-02 (1988). 
Criminal contempt penalties are different in principle 
from civil sanctions, because they serve entirely different 
ends.

A federal court’s inherent authority to award 
attorney’s fees, costs, or civil contempt penalties as a 
sanction for bad-faith misconduct arises from the 
character and circumstances of the case before the court. 
That authority is determined by the claims and defenses 
asserted, the residence of the parties, or other 
jurisdictional facts bringing the controversy within the 
judicial power conferred by Article III and by Congress.



13

In contrast, criminal contempt punishment promotes 
no compensatory or private interests, does not necessarily 
implicate subject-matter jurisdiction, and does not 
depend on the character of the proceedings under 
consideration. Criminal contempt power is not derived 
from Article Ill’s specification of the kinds of cases or 
controversies federal courts properly may hear and 
decide, but from an inherent right of self-protection the 
federal judiciary necessarily must have if it is to function 
effectively.

4. This case does not involve interference with 
jurisdictional determinations or criminal contempt 
sanctions. The narrow question presented also does not 
require consideration of very different, substantially more 
difficult issues involving a federal court’s asserted power, 
either inherently or by a rule of procedure, to award 
attorney’s fees as a sanction against those who wrongly 
invoke subject-matter jurisdiction. Resolution of those 
much broader, potentially more troublesome problems is 
not necessary to the disposition of this case, and should 
be left to a controversy that squarely presents them. 
Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 
346-48 (1936) (concurring opinion of Justice Brandeis); 
Northern Pipeline Construction Co. v. Marathon Pipe Line 
Co., 458 U.S. 50, 90 (1982) (concurring opinion of 
Justice Rehnquist).

5. Willy and his trial counsel did not wrongly invoke 
federal subject-matter jurisdiction, and they did not 
impede, obstruct, or delay the eventual determination 
that jurisdiction did not exist. They repeatedly, correctly, 
and in a procedurally appropriate manner contested the 
court’s constitutional competence to hear and decide 
their case. Their purported improprieties related only to



14

the merits of a dispute that the court was constitutionally 
powerless to decide, at every stage of the proceeding.

Coastal’s asserted good faith in removing the action, 
the district court’s presumptive good faith in hearing it, 
and the purportedly colorable jurisdiction exercised in 
deciding it are irrelevant. The judicial power of the 
United States is not determined by the good intentions of 
litigants or judges, or by claims that supposedly seem to 
confer subject-matter jurisdiction, but in reality do not. 
In a case otherwise beyond its constitutional authority, a 
federal court does not empower itself to award attorney’s 
fees by incorrectly resolving a jurisdictional issue. The 
Constitution and Congress determine which cases lower 
federal courts may hear and decide, not judges.

Federal courts are not helpless to deal effectively 
with misbehavior arising during their mistaken 
consideration of the merits of cases beyond their subject- 
matter jurisdiction. They can dismiss or remand the case. 
They can suspend, disbar, or sanction incompetent or 
irresponsible lawyers. They can reprimand offenders or, 
as a last resort, impose criminal contempt sanctions. But 
they are not authorized by statute, rule, or constitutional 
necessity to compensate litigants who mistakenly 
precipitate a futile and unconstitutional waste of judicial 
time and resources.

The district court was never empowered by the 
Constitution or by Congress to deal with this controversy. 
It lacked the constitutional authority to award attorney’s 
fees, to those who wrongly removed the case, for 
asserted misconduct relating only to the merits of 
unconstitutional litigation and not to jurisdictional issues. 
Because that sanction violated Article III, the district 
court’s unconstitutional order, and the judgment of the



court of appeals mistakenly affirming it, should be 
reversed.

ARGUM ENT

The district court violated Article III § 2 of the 
Constitution by awarding attorney’s fees, claimed by 
defendants who wrongly invoked subject-matter 
jurisdiction by mistakenly removing the case from a state 
court, as a sanction for asserted bad-faith litigation by 
the plaintiff, who correctly resisted the unconstitutional 
exercise of federal judicial power, and who did not 
impede, obstruct, or delay resolution of any 
jurisdictional issue.

Federal courts possess the inherent power to award 
attorney’s fees and costs for bad-faith litigation in Article 
III cases and controversies over which Congress has 
conferred the constitutional competence to act. They 
possess a coextensive inherent power, functionally 
equivalent to that existing in cases actually within their 
constitutional and statutory authority, to award attorney’s 
fees and costs as a sanction for obstruction of a 
jurisdictional determination. Apart from Article III and 
the case-or-controversy requirement, they exercise an 
inherent, defensive criminal contempt power to protect 
themselves, their judicial proceedings, and their lawful 
orders from calculated harm, disruption, or disobedience.

What federal courts do not have is an inherent power 
to award attorney’s fees or costs to those wrongly 
invoking their subject-matter jurisdiction, against those 
correctly resisting an unconstitutional exercise of federal 
judicial power, without obstructing the eventual 
determination that jurisdiction is lacking. Such an award 
violates Article III of the Constitution. The contrary 
holdings below substantially undermine this Court’s



16

uncompromising historical insistence that the federal 
judiciary must scrupulously observe, and confine itself 
within, the jurisdictional constraints prescribed by the 
Constitution and by Congress.

1. Absent congressional authorization, or 
obstruction of a jurisdictional determination, a United 
States district court cannot impose attorney’s fees or 
costs as a sanction in a case it has no constitutional 
power to decide.

In plain, simple language, Article III of the 
Constitution limits the judicial power of the United States 
to particularly described cases or controversies. Since 
Marbury v. Madison, 1 Cranch 137 (1803), this Court’s 
decisions often have stressed the principle that questions 
of federal court jurisdiction present constitutional issues, 
not simply procedural problems to be decided by resort 
to expediency, in whatever fashion best serves efficient 
judicial administration, institutional convenience, or the 
personal preferences of individual judges. Federal courts 
do not create their own subject-matter jurisdiction. The 
Court’s decisions repeatedly have underscored the simple 
but profoundly important proposition that federal courts 
are courts of limited jurisdiction, confined by Article III 
of the Constitution and by the legislation of Congress.11 
The Court has adhered rigorously to the view that 
limitations on federal jurisdiction "must be neither 
disregarded nor evaded," Owen Equipment & Erection 
Co. v. Kroger, 437 U.S. 365, 374 (1978), because 
permitting lower federal courts to act beyond 
constitutional and legislative constraints would invade the

11 E.g., Karcher v. May, 484 U.S. 72, 77 (1987); Insurance 
Corp. o f  Ireland, Ltd. v. Compagnie Des Bauxites De Guinee, 456 
U.S. 694, 701-02 (1982); Aldinger v. Howard, 427 U.S. 1, 15 
(1976).



17

province reserved to state courts by the Constitution.12 
"Due regard for the rightful independence of state 
governments . . . requires that [federal courts]
scrupulously confine their own jurisdiction to the precise 
limits which [Congress] has defined." Healy v. Ratta, 292 
U.S. 263, 270 (1934); Victory Carriers, Inc. v. Law, 404 
U.S. 202, 212 (1971).13

Congress did not empower the federal district court 
to act in this case. A statute purporting to confer such 
competence would have violated Article III. The case 
arose exclusively under state law, there was no federal 
question, and there was no diversity of citizenship.

Congress also did not authorize the award of 
attorney’s fees or costs to defendants wrongly invoking 
federal subject-matter jurisdiction, against a plaintiff 
properly resisting its unconstitutional exercise. Under the

12 "Let it be remembered, also, for just now we may be 
in some danger of forgetting it, that questions of 
jurisdiction were questions of power as between the United 
States and the several States." Curtis, Notice of the Death 
of Chief Justice Taney, Proceedings in Circuit Court of the 
United States for the First Circuit 9 (1864).

13 "For that reason, every federal appellate court has a 
special obligation to ‘satisfy itself not only of its own 
jurisdiction, but also of that of the lower courts in a cause 
under review’." Bender v. Williamsport Area School District, 
475 U.S. 534, 541 (1986), quoting Mitchell v. Maurer, 293 U.S. 
237, 244 (1934). When a lower federal court lacks subject- 
matter jurisdiction, the Supreme Court reviews the case 
"not [on] the merits but merely for the purpose of 
correcting the error of the lower court in entertaining the 
suit." United States v. Corrick, 298 U.S. 435, 440 (1936). Cf. 
Supreme Court Rule 14.1(i) ("If review of a judgment of a 
United States court of appeals is sought, the statement of 
the case shall also show the basis for federal jurisdiction in 
the court of first instance").



18

necessary and proper clause of the Constitution, Art. 1 § 
8, and the broad legislative authority conferred by Article 
III § 1 to create and determine the jurisdiction and other 
powers of lower federal courts. Congress undoubtedly has 
a constitutional prerogative to provide for recovery of 
attorney’s fees and costs against those wrongly invoking 
federal subject-matter jurisdiction, even in cases outside 
Article III. Hanna v. Plumer, 380 U.S. 460, 471-72 
(1965); Sibbach v Wilson & Co., Inc., 312 U.S. 1, 9-10 
(1941).14 For obvious reasons, however, Congress has 
never authorized recovery of fees or costs against parties 
who prevail on jurisdictional grounds.

Since the Federal Rules of Civil Procedure do not 
confer subject-matter jurisdiction on federal courts, 
neither the Rules Enabling Act, 28 U.S.C. § 2072(a), nor 
F.R.Civ.P. 11 provides a substantive source of judicial 
power, beyond that conferred by Article III and by 
Congress.15 Nor can it be maintained plausibly that a

14 See, e.g., 28 U.S.C. § 1919 (authorizing "payment of 
just costs" in any action or suit dismissed for lack of 
jurisdiction); 28 U.S.C. § 1447(c) (authorizing attorney’s 
fees and costs for wrongful removal). See also Mashak v. 
Hacker, 303 F.2d 526, 527 (7 Cir. 1962), confirming the 
congressional power to authorize recovery of costs in the 
absence of subject-matter jurisdiction.

15 "These rules shall not be construed to extend or limit 
the jurisdiction of the United States district courts 
. . F.R.Civ.P. 82. Owen Equipment & Erection Co. v. Kroger, 
437 U.S. 365, 370 and n. 7 (1978); Aldinger v. Howard, 427 
U.S. 1, 8-9 (1976); Sibbach v. Wilson & Co., Inc., 312 U.S. 1, 10 
(1941); cf. 28 U.S.C. § 2072(b) (Federal Rules of Civil 
Procedure do not "abridge, enlarge or modify any 
substantive right"). The lower federal courts in this case, 
invoking Rule 11 even though the district court never 
possessed subject-matter jurisdiction at any stage of the 
proceedings, missed this point. See note 29, infra.



19

federal court’s acknowledged collateral authority to 
award attorney’s fees as a sanction in a case that was 
within its Article III jurisdiction, but that was voluntarily 
dismissed by the sanctioned parties, as in Cooler & Cell v.
Hartmarx Corp., 496 U .S .__ , 110 S.Ct, 2447, 2456, 110
L.Ed.2d 359, 376 (1990), encompasses the entirely 
different situation in which a federal court was never 
constitutionally empowered to act, at any stage of the 
proceedings. Like pendent or ancillary jurisdiction,16 an 
exercise of federal judicial power that is collateral to a 
federal case, as in Cooler & Gell, demands some sort of 
Article III jurisdiction at some point in the controversy. 
If federal subject-matter jurisdiction never existed, at any 
stage of the proceedings before the federal court, an 
award of attorney’s fees cannot be deemed collateral to 
anything that Article III permits the court to decide.

Coastal’s claimed entitlement to attorney’s fees for 
asserted bad-faith litigation, apart from an Article III 
case or controversy, is not in itself "consonant with the 
exercise of the judicial function in the determination of 
controversies to which under the Constitution the 
[federal] judicial power extends." Aetna Life Insurance 
Co. v. Haworth, 300 U.S. 227, 240 (1937). An "interest 
in attorney’s fees is, of course, insufficient to create an 
Article III case or controversy where none exists on the 
merits of the underlying claim." Lewis v. Continental
Bank Corp., 494 U.S. 472, __ , 110 S. Ct. 1249, 1255,
108 L.Ed.2d 400, 413 (1990), citing Diamond v. Charles, 
476 U.S. 54, 70-71 (1986). In the absence of statute, or 
obstruction of the determination of its jurisdiction, a

16 Finley v. United States, 490 U.S. 545 (1989); Owen 
Equipment & Erection Co. v. Kroger, 437 U.S. 365 (1978); 
Aldinger v. Howard, 427 U.S. 1 (1976); United Mine Workers v. 
Gibbs, 383 U.S. 715 (1966).



20

federal court is not constitutionally empowered to 
adjudicate the quality of a litigant’s performance on the 
merits of unconstitutional litigation, or to award costs or 
fees merely because a federal judge thinks that might be 
a good idea.

As with any of its other orders, the validity of a 
federal court’s award of attorney’s fees or costs as a 
sanction for asserted bad-faith litigation, unrelated to 
interference with or obstruction of a jurisdictional 
determination, "depends upon that court’s having 
jurisdiction over both the subject-matter and the 
parties."17 Without congressional authorization, a federal 
court lacking Article III subject-matter jurisdiction has no 
inherent power to order the payment of fines, costs, fees, 
or expenses of litigation, even against parties wrongly 
invoking its jurisdiction. "If there were no jurisdiction, 
there was no power to do anything but to strike the case 
from the docket.”18 An unconstitutional award of costs or 
attorney’s fees, like an order imposing functionally 
equivalent civil contempt and statutory penalties, must be

17 Insurance Corp. o f Ireland, Ltd. v. Compagnie Des 
Bauxites De Guinee, 456 U.S. 694, 701-02 (1982). The Court in 
Compagnie Des Bauxites and other decisions draws a bright 
line between subject-matter jurisdiction, which implicates 
Article III concerns, and personal jurisdiction over parties 
to a federal controversy, which does not. See, e.g., United 
States Catholic Conference v. Abortion Rights Mobilization, Inc., 
487 U.S. 72, 77 (1988); Omni Capital Internal’l, Ltd. v. Rudolf 
Wolff  & Co., Ltd., 484 U.S. 97, 104 (1987).

18 The Mayor v. Cooper, 6 Wall. 247, 250-51 (1868); Smyth 
v. Asphalt Belt Ry. Co., 267 U.S. 326, 330 (1925); Lion Bonding 
& Surety Co. v. Karatz, 262 U.S. 640, 642 (1923); Citizens’ Bank 
v. Cannon, 164 U.S. 319, 324 (1896); Blacklock v. Small, 127 U.S. 
96, 105 (1888); Mansfield, Coldwater & Lake Michigan Ry. Co. v. 
Swan, 111 U.S. 379, 386-87 (1884).



21

reversed "in its entirety."19

It remains a "fair presumption" that federal courts 
lack the constitutional power to act until the contrary 
appears.20 They cannot exercise an inherent power to 
award costs or attorney’s fees, without congressional 
authorization, against those properly resisting the 
mistaken exercise of subject-matter jurisdiction, when 
Article III competence to decide the case never existed at 
any stage of the litigation. If the district court had 
correctly determined that it lacked the constitutional 
authority to decide Willy’s case, it would have been 
empowered to do no more than enter an order promptly 
remanding the controversy. Denying the power to award 
fees and costs to federal judges correctly deciding their 
lack of subject-matter jurisdiction, but conferring it on 
those who have erred in that determination, "would by 
the act of the parties [and a federal judge] work a 
wrongful extension of federal jurisdiction and give district 
courts power the Congress has denied them." American 
Fire & Cas. Co. v. Finn, 341 U.S. 6, 18 (1951).

19 United States v. United Mine Workers, 330 U.S. 258, 294- 
95 (1947) (civil contempt penalties for violation of 
temporary restraining order); United States Catholic 
Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72, 76- 
80 (1988) (civil contempt penalties for resistance to 
subpoena duces tecum in case over which district court 
exercised colorable jurisdiction); United States v. Morton Salt 
Co., 338 U.S. 632, 642 (1950) (statutory civil penalties).

20 Turner v. President, Directors, and Co. o f the Bank o f  
North America, 4 Dali. 8, 11 (1799). "A federal court may not 
decide cases when it cannot decide cases, and must 
determine whether it can, before it may." Cross-Sound Ferry
Services, Inc. v. ICC, 934 F.2d 327, __  (D.C. Cir. 1991)
(dissenting opinion of Judge Thomas).



22

2. This case does not involve a federal court’s 
inherent power to award attorney’s fees and costs for  
bad-faith  litigation w ithin its Article III subject-m atter  
ju risd iction , or for obstruction o f a jurisd ictional 
determ ination.

Federal courts have an established inherent power to 
award attorney’s fees and court costs for bad-faith 
litigation, in cases they hear and decide under Article III, 
pursuant to a congressional grant of subject-matter 
jurisdiction.21 "The inherent powers of federal courts are 
those which ‘are necessary to the exercise of all others’." 
Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980), 
citing United States v. Hudson, 1 Cranch 32, 34 (1812). 
Inherent power under Article III "is not a broad reservoir 
. . ., ready at an imperial hand, but a limited source; an 
implied power squeezed from the need to make the court 
function."22

Even in cases beyond the judicial power conferred by 
Article III, federal courts historically have exercised an 
inherent, functionally equivalent power to adjudicate 
questions relating to their subject-matter jurisdiction, to 
punish disruptions of or interference with those 
jurisdictional determinations, and to sanction willful

21 Chambers v. NASCO, Inc., __  U. S. __  (1991) [59
U.S.L.W. 4595, June 6, 1991]; Roadway Express, Inc. v. Piper, 
447 U.S. 752 (1980); Alyeska Pipeline Service Co. v. Wilderness 
Society, 421 U.S. 240, 258-59 (1975); Hall v. Cole, 412 U.S. 1, 5 
(1973); F.D. Rich Co., Inc. v. United States ex rel. Industrial 
Lumber Co., Inc., 417 U.S. 116, 129 (1974); Link v. Wabash R. 
Co., 370 U.S. 626 (1962).

22 NASCO, Inc. v. Calcasieu Television and Radio, Inc., 894 
F.2d 6%, 702 (5 Cir. 1990), af fdsub nom. Chambers v. NASCO,
Inc., __  U.S. __  (1991) [59 U.S.L.W. 4595, June 6, 1991],
citing Roadway Express v. Piper, Link v. Wabash R. Co., and 
United States v. Hudson.



23

disobedience of court orders designed to enable 
resolution of subject-matter jurisdictional questions to be 
undertaken in an orderly, unhurried, procedurally 
appropriate manner.23 With or without a congressional 
grant of subject-matter jurisdiction, binding federal court 
orders may be issued "as necessary for the court to 
determine and rule upon its own jurisdiction, including 
jurisdiction over the subject matter." United States 
Catholic Conference v. Abortion Rights Mobilization, Inc., 
487 U.S. 72, 79 (1988). The same considerations 
reinforce the authority of Congress, consistently with the 
sweeping legislative power over lower federal courts 
conferred by the necessary and proper clause and by 
Article III § 1 of the Constitution, to provide by statute 
for recovery of costs and attorney’s fees against those 
wrongly invoking federal jurisdiction. Sibbach v. Wilson & 
Co., Inc., 312 U.S. 1, 9-10 (1941).

A constitutional necessity, in the sense contemplated 
by United States v. Hudson, 1 Cranch 32 (1812), dictates 
such a result. Litigants and lawyers before a federal 
court cannot be permitted to impede, obstruct, or delay 
the orderly resolution of jurisdictional issues, or to 
gamble on the possibility of escaping responsibility for 
their actions if the court’s power to act on the merits 
eventually is foreclosed. Jurisdiction to determine 
jurisdiction logically must implicate precisely those

23 United States v. Shipp, 203 U.S. 563, 573 (1906); United 
States v. United Mine Workers, 330 U.S. 258, 289-95 (1947); 
United States Catholic Conference v. Abortion Rights Mobilization, 
Inc., 487 U.S. 72, 79 (1988). "The federal courts have 
jurisdiction to determine whether they have jurisdiction to 
hear a case . . ., and therefore have authority to sanction 
parties for misfeasance connected with the determination 
of whether jurisdiction exists.” Davis v. Cluet, Peabody & Co., 
667 F.2d 1371, 1374 n. 8 (11 Cir. 1982).



24

inherent powers that the court exercises in Article III 
cases or controversies. Even if a federal court ultimately 
is determined not to have the constitutional power to 
decide the case, it still must have the authority to resolve 
jurisdictional questions, free from identical impositions 
and distractions that burden the efficient and orderly 
determination of all other cases on the docket.

Inherent and constitutional powers are interrelated 
and correlative. In a case within the court’s subject- 
matter jurisdiction, the power to award attorney’s fees 
and costs for bad-faith litigation is essential to preserve 
the court’s authority over a case properly before it for 
decision. Precisely the same authority logically must 
extend to obstruction of the court’s consideration and 
determination of jurisdictional issues. Conversely, if the 
Constitution and Congress never authorized a federal 
court to act in the first place, at any stage of the 
proceedings, there can be no conceivable constitutional 
necessity to award attorney’s fees against litigants 
properly contesting federal subject-matter jurisdiction, in 
favor of litigants mistakenly invoking it, to compensate 
them for wrongly inflicting a case on the federal courts. 
When subject-matter jurisdiction is lacking, and Congress 
has not authorized recovery of fees or costs, the 
appropriate course is found, not in Rule 11, or in some 
supposed inherent power, but in F.R.Civ.P. 12(h)(3)24 or 
in 28 U.S.C. § 1447(c)25

24 "Whenever it appears by suggestion of the parties or 
otherwise that the court lacks jurisdiction of the subject 
matter, the court shall dismiss the action."

25 "If at any time before final judgment it appears that 
the district court lacks subject matter jurisdiction, the case 
shall be remanded."



25

3. A federal court’s inherent power to impose 
criminal contempt sanctions, without statutory 
authorization or an Article III case or controversy, does 
not justify awarding attorney’s fees to litigants who 
wrongly invoke subject-matter jurisdiction.

Federal judges always have had an inherent criminal 
contempt power, necessary to protect themselves, their 
courts, and all acts incidental to their judicial office from 
disruption, physical harm, abuse, or obstruction. Young 
v. United States ex rel. Vuitton et Fils S. A ., 481 U.S. 787, 
798 (1987); Michaelson v. United States ex rel. Chicago, 
St. Paul, Minneapolis & Omaha Ry. Co., 266 U.S. 42, 65- 
66 (1924). Because the necessity for the existence and 
exercise of such an inherent power is not determined by 
the character of the case before the court, it is neither 
subject to the Article III case-or-controversy requirement 
nor dependent upon statutory authorization by Congress. 
United States v. Hudson, 1 Cranch 32 (1812); Cooke v. 
United States, 267 U.S. 517 (1925).26

For example, federal judges conceivably might 
exercise inherent criminal contempt powers, not only in 
conjunction with cases over which they lack Article III

26 The example of the federal judge punched in the 
nose during the hearing of a case which is then promptly 
dismissed, thought by Coastal somehow to be relevant, is 
not helpful here. Szabo Food Service, Inc. v. Canteen Corp., 
823 F.2d 1073, 1076-79 (7 Cir. 1987), cert, dism'd 485 U.S. 901 
(1988), cited in Respondent’s Brief in Opposition to 
Certiorari at p. 8. It makes good sense to say that a federal 
judge, assaulted during the course of a judicial proceeding, 
must have the inherent power, apart from the court’s 
jurisdiction to hear the case, to jail the offender or to 
impose a substantial fine. It makes no sense to maintain 
that the judge possesses an inherent power to award 
attorney’s fees or costs for such misbehavior.



26

subject-matter jurisdiction, but when participating in 
judicial business that is not a case or controversy at all, 
such as judicial conferences, investitures, dedications of 
portraits, naturalization proceedings, and similar 
ceremonial occasions, whether within or outside of 
federal courthouses. Inherent criminal contempt powers 
undoubtedly would reach willful violations of valid court 
rules and orders that relate, not to the adjudication of 
individual cases, but to maintaining the physical security, 
integrity, and decorum of all federal judicial proceedings, 
such as by prohibiting cameras, recording equipment, 
cellular telephones, paging devices, or weapons in the 
courtroom, or by requiring lawyers, litigants, or witnesses 
to pass through metal detectors at security checkpoints.

The inherent criminal contempt power serves 
purposes altogether different from those promoted by 
civil penalties. The power to impose attorney’s fees, 
costs, or civil contempt punishment as a sanction arises 
from the facts and circumstances of individual cases 
within the Article III judicial power. There is a necessity 
for them, in a constitutional sense, because the court is 
empowered by the Constitution and by Congress to 
decide the case.

In contrast, criminal contempt penalties promote no 
compensatory or private interests, and are not dependent 
on the circumstantial context within which an actual or 
imminently threatened disruption or obstruction of 
judicial authority occurs. The inherent criminal contempt 
power "[serves] to vindicate the jurisdiction and authority 
of courts to enforce orders and to punish acts of 
disobedience," Gompers v. Bucks Stove & Range Co., 221 
U.S. 418, 450 (1911), to preserve order and decorum in 
federal courtrooms, and to penalize disruption of those



27

duties federal judges are constitutionally empowered to 
undertake by Article III and by Congress. These 
considerations are irrelevant to the attorney’s fees 
awarded in this case.27

4. This ease does not require the Court to determine 
the extent of a federal court’s inherent power to impose 
attorney’s fees and costs, in the absence of statute or 
subject-matter jurisdiction, as a sanction for obstruction
of jurisdictional determinations.

This case does not involve interference with a 
jurisdictional determination or a criminal contempt 
sanction. The question presented also does not require 
the Court to determine the sources and scope of a 
United States district court’s authority to award 
attorney’s fees or costs, in the absence of statute or 
subject-matter jurisdiction. That inquiry presents a 
number of substantial difficulties. The Court should 
defer it to another day. Ashwander v. Tennessee Valley 
Authority, 297 U.S. 288, 346-48 (1936) (concurring 
opinion of Justice Brandeis).28

27 Accusations of criminal contempt cannot be made 
or prosecuted by opposing counsel for private parties in 
civil litigation. United States v. Providence Journal Co., 485 
U.S. 693 (1988). They implicate constitutional principles 
applicable to criminal prosecutions, including the 
presumption of innocence and the requirement of proof of 
guilt beyond a reasonable doubt. Michaelson v. United States 
ex rel. Chicago, St. Paul, Minneapolis, & Omaha Ry. Co., 266 
U.S. 42, 66 (1924).

28 Particularly when Article III problems are 
presented, "rigorous adherence to the principle that this 
Court should decide no more of a constitutional question 
than is absolutely necessary accords with both our decided 
cases and with sound judicial policy." Northern Pipeline 
Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 90 
(1982) (concurring opinion of Justice Rehnquist).



28

1. The Rules Enabling Act empowers this Court "to
prescribe general rules of practice and procedure and 
rules of evidence for cases in the United States district 
courts . . 28 U.S.C. § 2072(a). The Federal Rules of
Civil Procedure by their terms are applicable to "all suits 
of a civil nature" in the United States district courts, 
F.R.Civ.P. 1, apply "to civil actions removed to the 
United States district courts from the state courts," and 
"govern procedure after removal." F.R.Civ.P. 81(c).

Notwithstanding this unequivocal language, the Rules 
Enabling Act and F.R.Civ.P. 11 are irrelevant and 
inapplicable to cases or controversies that a federal court 
is not constitutionally empowered to decide. Congress 
undoubtedly did not authorize the Supreme Court to 
"prescribe general rules of practice and procedure" for 
unconstitutional litigation. The implicit premise of both 
the Rules Enabling Act and the Federal Rules of Civil 
Procedure is that rules of practice and procedure are not 
necessary for disputes beyond the judicial power 
conferred by Article III. Such cases must be promptly 
dismissed or remanded, because to do otherwise would 
violate the Constitution of the United States.29

2. Congress has provided in 28 U.S.C. § 1447(c) for 
recovery of attorney’s fees and costs when a defendant

29 Procedural rules governing court administration (for 
example, barring television cameras or recording devices in 
federal courtrooms) are authorized, 28 U.S.C. § 2071, 
because their validity is not dependent on the 
circumstances of individual cases. In contrast, rules 
governing pleadings, discovery, motions, hearings, trials, 
and related matters under § 2072(a) depend for their 
rational application on subject-matter jurisdiction. The 
Federal Rules of Civil Procedure explicitly so provide. See 
note 15, supra.



29

wrongly removes a case over which the federal court 
lacks subject-matter jurisdiction.30 In contrast, when a 
plaintiffs complaint mistakenly invokes subject-matter 
jurisdiction, Congress in 28 U.S.C. § 1919 has authorized 
only the recovery of costs. Attorney’s fees are not costs, 
unless Congress explicitly so provides. Atyeska Pipeline 
Service Co. v. Wilderness Society, 421 U.S. 240, 260 
(1975) (Congress has not "extended any roving authority 
to the Judiciary to allow counsel fees as costs or 
otherwise whenever the courts might deem them 
warranted"). It is implausible and unreasonable to 
suggest that Rule 11 or an inherent power authorizes 
attorney’s fees as a sanction for a plaintiffs filing of a 
jurisdictionally defective complaint, in the face of a 
statute authorizing only costs when a complaint fails to 
invoke subject-matter jurisdiction.

3. Lower federal courts have held or implied in dicta 
that, apart from any statutory authority, they can use 
Rule 11 or an equivalent inherent power to award 
attorney’s fees as a sanction against a jurisdictionally

30 Since Congress has authorized attorney’s fees and 
costs for wrongful removal, there is no need to invoke Rule 
11 to award them, a point lower federal courts consistently 
have missed. See, e.g., Unanue-Casal v. Unanue-Casal, 898 F.2d 
839, 841 (1 Cir. 1990) (attorney’s fees sought under Rule 11, 
in absence of subject-matter jurisdiction, against defendant 
wrongfully removing case from state court); S. A. Auto 
Lube, Inc. v. Jiffy Lube Inter not’l, Inc., 842 F.2d 946, 947 n. 1 (7 
Cir. 1988) (same); Vatican Shrimp Co., Inc. v. Solis, 820 F.2d 
674, 680 and n. 7 (5 Cir. 1987), cert, denied 484 U.S. 953 (1987) 
(same); News-Texan, Inc. v. City o f Garland, 814 F.2d 216, 220 
and n. 8 (5 Cir. 1987) (same); Johnson v. Smith, 630 F. Supp. 
1, 4 (N.D. Cal. 1986) (samel; see also Westlake North Property 
Owners Ass’n v. City o f Thousand Oaks, 915 F.2d 1301, 1303 (9 
Cir. 1990) (attorney’s fees sought by removing defendants 
following dismissal on merits; cites and follows Willy).



30

defective complaint or removal petition, on the theory 
that they are exercising jurisdiction to determine 
jurisdiction.31 For example, in Szabo Food Sendee, Inc. v. 
Canteen Corp., 823 F.2d 1073, 1078 (7 Cir. 1987), cert, 
dism’d 485 U.S. 901 (1988), followed in Schering Corp. v. 
Vitarine Pharmaceuticals, Inc., 889 F.2d 490, 495 (3 Cir. 
1989), the court thought that a federal trial court could

engage in all the usual judicial acts, even 
though it has no power to decide the case on 
the merits. It may supervise discovery, hold a 
trial, and order the payment of costs at the 
end. If the complaint is indeed too silly to 
create subject matter jurisdiction, attorneys’ 
fees should be an ordinary incident of the 
award of costs.

31 See, e.g., Chemiakin v. Yefimov, 932 F.2d 124, 127 (2 Cir. 
1991) (cites and purports to follow Willy in holding that 
federal courts "may impose sanctions pursuant to Rule 11," 
even when they lack subject-matter jurisdiction to 
adjudicate the merits of a dispute); Szabo Food Service, Inc. 
v. Canteen Corp., 823 F.2d 1073, 1076-79 (7 Cir. 1987), cert, 
dism’d 485 U.S. 901 (1988) ("silly” complaint or other 
improper imposition on federal court’s time and resources 
sanctionable as interference with jurisdiction to determine 
jurisdiction); Orange Production Credit Ass’n v. Frontline 
Ventures Ltd., 792 F.2d 797, 800 (9 Cir. 1986) (filing of 
complaint "completely [lacking] a factual foundation for 
subject matter jurisdiction" sanctionable under Rule 11); 
Wojan v. General Motors Corp., 851 F.2d 969 (7 Cir. 1988) 
(plaintiff sought Rule 11 sanctions against defendant for 
alleged bad-faith concealment of jurisdictional defect) ; 
Muthig v. Brant Point Nantucket, Inc., 838 F.2d 600, 603 (1 Cir. 
1988) (groundless complaint, followed by Rule 41(a) 
dismissal, sanctionable as misconduct committed during 
consideration of jurisdiction); cf. Trohimovich v. Com­
missioner, 776 F.2d 873, 875 (9 Cir. 1985) (appeal dismissed 
for lack of jurisdiction; appellant sanctioned for abusive 
tactics). See also the wrongful removal cases cited in note 
30, supra.



31

This view of the federal judicial power is mistaken. 
Cases presenting silly complaints or removal petitions 
that do not invoke subject-matter jurisdiction must be 
immediately dismissed or remanded, not allowed to roll 
forward indefinitely while the judge "supervises 
discovery" or "holds a trial."32 A federal court abdicating 
its constitutional responsibility to determine promptly and 
correctly whether it has the Article III competence to 
decide the case does not acquire some metaphysical, 
transcendent authority over the controversy merely by 
proclaiming it has been doing one thing (determining 
jurisdiction), when in reality it has been doing something 
entirely different (deciding the case). A judge’s error 
does not generate the constitutional authority to act. 
Acceptance of that idea would undermine Article Ill’s 
historical role as a meaningful, effective limitation on the 
power of the federal judiciary.

4. Invoking Rule 11 or inherent power as a 
justification for awarding attorney’s fees, in the absence 
of subject-matter jurisdiction, ignores the circumstance 
that functionally equivalent civil contempt penalties 
depend on such jurisdiction:

It does not follow, of course, that simply 
because a defendant may be punished for 
criminal contempt for disobedience of an 
order later set aside on appeal, that the 
plaintiff in the action may profit by way of a 
fine imposed in a simultaneous proceeding for 
civil contempt based upon a violation of the 
same order. The right to remedial relief falls

32 See Davis v. Cluet, Peabody & Co., 667 F.2d 1371, 1373 
(11 Cir. 1982) (federal district court, lacking subject-matter 
jurisdiction, cannot impose sanction of dismissal on the 
merits for misconduct unrelated to jurisdictional 
determination).



32

with an injunction which events prove was 
erroneously issued, . , . and a fortiorari when 
the injunction or restraining order was beyond 
the jurisdiction of the court.

United States v. United Mine Workers, 330 U.S. 258, 294- 
95 (1947) (emphasis added).

5. Lower courts sustaining awards of attorneys fees 
in the absence of statute or subject-matter jurisdiction do 
not cite this Court’s cases denying to federal trial judges 
the power to award costs without authorization from 
Congress, note 18, supra. They fail to point out that 28 
U.S.C. § 1919 allows only costs, not attorney’s fees, when 
a plaintiff’s complaint is dismissed for lack of subject- 
matter jurisdiction. They overlook the circumstance that 
Rule 11 and the Rules Enabling Act have no rational 
application in cases beyond the Article III judicial power. 
They do not even mention, much less address, the 
constitutional implications of their decisions.

The Court need not and should not attempt to 
resolve now these broader, more difficult questions. 
Willy’s case presents a much narrower, simpler issue.

5. The district court had no constitutional power to 
award attorney’s fees to defendants wrongly invoking its 
subject-matter jurisdiction, as a sanction for asserted 
misconduct relating only to the merits of a case it should 
never have decided.

In the absence of congressional authorization, the 
district court awarded attorney’s fees to defendants who 
wrongly invoked its subject-matter jurisdiction, against a 
plaintiff who properly contested such jurisdiction, and 
who promoted, rather than impeded or obstructed, the 
eventual determination that the court lacked the 
constitutional power to decide the case. The self-



33

defeating irrationality of that decision is apparent when 
the inherent power to sanction is viewed in conjunction 
with related policies underlying F.R.Civ.P. 11.

Rule 11, like the inherent power to award attorney’s 
fees and costs for bad-faith litigation, is designed to 
streamline federal practice, to discourage legally or 
factually baseless filings, and to free the federal courts 
from having to devote scarce judicial time and resources 
to matters that should not have been brought or pursued.
Cooler & Gell v. Hartmarx Corp., 496 U .S .___, 110 S.Ct.
2447, 2456, 110 L.Ed.2d 359, 376 (1990). The baseless 
filing that initiated this case was Coastal’s removal 
petition. Although they did not prevail in this litigation, 
the defendants were awarded more than $19,000.00 in 
attorney’s fees for preparing documents, conducting 
conferences, and attending hearings in a case that never 
should have been in the federal court in the first place. 
Far from discouraging the filing of legally or factually 
baseless complaints or removal petitions, the Fifth 
Circuit’s inversion of Rule 11 actually encourages them.

Coastal’s improvident removal of this case delayed its 
final disposition for years and inflicted significant harm 
on the federal system and on Willy himself. A wrongful, 
strategically motivated removal petition compelled an 
individual with limited financial resources to fight a 
marathon war of attrition against an $8 billion corporate 
adversary, over issues having nothing whatever to do with 
the merits of his case. Willy’s state claims still have not 
been brought to trial, nearly six years after they were 
properly asserted in a state court.

Recognizing an unprecedented inherent consti­
tutional power to award attorney’s fees in this case would 
make no more sense than a statute authorizing the



34

recovery of attorney’s fees and costs against plaintiffs 
who succeed in having cases remanded to state court for 
lack of subject-matter jurisdiction, in favor of defendants 
wrongly removing them. There is no sound reason in 
logic or policy for compensating those who mistakenly 
waste a federal court’s valuable time and resources by 
persuading it to consider and decide a case that is beyond 
its constitutional province, particularly when other 
alternatives are available.33

The idea of colorable jurisdiction, to which the court 
of appeals referred in passing, 915 F.2d at 967 n. 7 (Pet. 
App. 52), has been decisively repudiated by this Court as 
a source of federal judicial authority. United States 
Catholic Conference v. Abortion Rights Mobilization, Inc., 
487 U.S. 72 (1988). Either a federal court has the 
constitutional power to act, or it does not. If it does not, 
no purported misconduct of a plaintiff, supposedly 
colorable claims of defendants, or asserted good faith of 
a federal trial judge can confer constitutional competence 
when it does not otherwise exist.34 A federal court’s 
mistaken determination that it has the constitutional 
authority to act, when it really does not, cannot 
spontaneously generate the Article III judicial power to 
award attorney’s fees.

33 A federal court has an inherent power to suspend, 
disbar, or otherwise sanction an irresponsible or 
incompetent attorney. Ex parte Burr, 9 Wheat. 529, 531 
(1824); Ex parte Robinson, 19 Wall. 505, 512 (1874). The court 
also can issue oral or written reprimands and, as a last 
resort, impose criminal contempt sanctions.

34 Sosna v. Iowa, 419 U.S. 393, 398 (1975); Dred Scott v. 
Sandford, 19 How. 393, 402 (1857); Jackson v. Ashton, 8 Pet. 
148 (1834); Caproti v. Van Noorden, 2 Cranch 126, 127 (1804).



35

Willy was not sanctioned for interfering with the 
district court’s determination of its lack of jurisdiction. 
He was sanctioned for his lawyer’s purported misconduct 
during the district court’s unconstitutional exercise of 
federal judicial power over the merits of his case, against 
which he repeatedly and properly protested, at every 
relevant stage of the proceedings. The award of 
attorney’s fees to Coastal violated Article III and 
seriously compromised the long-standing, firmly 
entrenched principle of federal constitutional law that the 
authority to adjudicate cases and controversies must 
emanate from the Constitution and Congress, not from 
the mere inclination of a federal judge that having such 
power might be useful. Judges enjoy no exemption from 
constitutional restraints. "The courts, no less than the 
political branches of the government, must respect the 
limits of their authority." United States Catholic 
Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 
72, 77 (1988).

CONCLUSION

The district court’s sanctions order, and the judgment 
of the court of appeals affirming it, are unconstitutional 
and should be reversed.

Respectfully submitted,

M ic h a e l  A. M a n e s s  
Counsel of Record 
for Petitioner 
1900 North Loop West 
Suite 500
Houston, Texas 77018 
(713) 680-9922 
713) 680-0804 (FAX)July 1991



M ic h a e l  A . M a n e s s
A t t o r n e y  A n d  C o u n s e l o r  At L a w

1900 North Loop West, Suite 500 Telephone: (713) 680-9922
Houston, Texas 77018 FAX: (713) 680-0804

July 31, 1991

TO: All participants in the New York University School of Law
Rule 11 Conference, November 2-3, 1990, and o t h e r
interested individuals

FROM: Michael A. Maness
RE: Willy v. Coastal Coro.. 915 F.2d 965 (5 Cir. 1990)

(Certiorari granted June 17, 1991)

Enclosed is a copy of the brief for the petitioner.

cc: All Judges of the United States Court of Appeals for the
Fifth Circuit
All Judges of the United States District Court for the 
Southern District of Texas, Houston Division

c:\word\90-201\82.doc 

July 31, 1991 5:12 PM